• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

China's August Oil Consumption Drops 5.4% from July - First Decline in 6 Months

Posted on: Monday, 21 September 2009, 05:00 CDT

HONG KONG, Sep. 21 /PRNewswire/ -- Chinese oil demand in August slid 5.4% from July, arresting a month-on-month climb seen since March this year, as the world's second largest oil consumer reined in oil imports as well as crude throughput rates at domestic refineries, according to a data analysis just released by Platts.

China's implied oil demand totaled 33.02 million metric tons in August versus 34.92 million metric tons in July, a Platts analysis showed September 21. However, compared with August 2008, apparent oil consumption last month was still 3.58% higher.

The country had ratcheted up crude imports as well as refining rates to an all-time high in July, which is said to have left state-owned refiners Sinopec and PetroChina with swollen refined product inventories in the face of lackluster demand.

"August seems to have brought a reality check for refiners in China," said Vandana Hari, Asia news director at Platts. "Domestic fuel demand has clearly been lagging their high processing rates, and storage space is finite. However, the correction could be short-lived because the government's new domestic oil pricing policy implemented since the start of this year incentivizes high refining volumes. As long as inventories can be managed by boosting product exports and reducing imports, refinery throughput might remain high."

Refined product stockpiles held by Sinopec and PetroChina at the end of July were some 30% higher than the corresponding period of 2008 and had crept up 7% from a month ago, Chinese media reported earlier. At the same time, July oil products sales in China fell about 6% from a year ago and shrank 10% from June.

Refiners responded by cutting collective crude throughput in August by 1.7% from July to 32.56 million metric tons or 7.7 million barrels per day -- the first monthly reduction since February 2009. Crude imports were cut by 5.9% from July to 18.48 million metric tons or 4.38 million barrels per day in August.

Chinese companies also slashed August refined product imports by 28% from July and boosted exports of their own output by nearly 10%, which sent net products imports plunging to 460,000 metric tons, a level not seen in many years.

Apart from rising oil inventories and declining demand, a Yuan 220-per-metric-ton ($32.2/metric ton) reduction in the government-controlled domestic products prices at the end of July is also said to have curbed refiners' appetite to process crude.

MONTHLY TRADE DATA IN MILLION METRIC TONS: Aug'09 Aug'08 % Chg Jul'09 Jun'09 May'09 Apr'09 Mar'09 Net crude imports 17.92 15.25 +17.51 19.20 16.31 16.62 15.81 15.87 Crude production 16.32 16.07 +1.56 16.14 15.71 16.03 15.59 15.82 Apparent demand 33.02 31.88 +3.58 34.92 33.35 33.23 31.47 31.26

Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. The government releases data on imports, exports, domestic crude production and refinery throughput, but does not give official figures on the country's actual oil consumption or stockpiles.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.

For more information on crude oil, visit the Platts website at www.platts.com For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.

About Platts: Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemical, shipping, and metals markets from 17 offices worldwide. Platts' real-time news, pricing, analytical services and conferences help markets operate with transparency and efficiency. Traders, risk managers, analysts, and industry leaders depend upon Platts to help them make better trading and investment decisions. Additional information is available at http://www.platts.com.

About The McGraw-Hill Companies:

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2008 were $6.4 billion. Additional information is available at www.mcgraw-hill.com.

SOURCE Platts

Source: PR Newswire

More News in this Category